Brexit's Implications for UK and European Sanctions Policy

In a new report by the Center on Global Energy Policy, authors Richard Nephew, program director for Economic Statecraft, Sanctions, and Energy Markets at the Center on Global Energy Policy, and David Mortlock, partner and Chair of the Government Relations Group at the law firm of Willkie Farr & Gallagher LLP, outline implications of the UK's decision to withdraw from the European Union in relation to the view and execution of economic sanctions policies in both regions. The paper reviews the legal and political history of EU and UK sanctions policies since the Lisbon Treaty came into effect in 2009 as well as three cases of sanctions policymaking and enforcement – against Iran, Russia, and terrorists – to identify common interests and themes, as well as differences in how the UK and EU perceived sanctions enforcement. The report concludes by offering up three observations concerning how the UK and EU will move forward in their respective sanctions policies and two recommendations for how these two entities, along with the United States, should work together to preserve the benefits that existed prior to BREXIT.

Key Findings and Recommendations:

- Just as other trade and foreign policy matters were intertwined by the UK and EU until BREXIT, sanctions policies were joined together and had an impact both in the selection and the execution of decisions by both the UK and the EU. Even beyond matters of policy, the UK was (and, for the time being, is) a major contributor of information and capability to the EU sanctions machine. How the EU will adapt to its absence on more prosaic, practical terms remains to be seen.

- Notwithstanding some speculation to the contrary, the EU and UK are likelier to maintain a consistent sanctions posture than they are to split, certainly in the near to mid-term.

- There is some chance of a long term shift in EU and UK perspectives on sanctions, depending on how the respective self interests of the EU and UK also shift in the future.

- What’s more likely to change in the future is not the desire of the EU or UK to impose sanctions in response to bad behavior, but rather the tools to be used.

- The EU and the UK should build into whatever succeeds the UK’s formal involvement in the EU the capacity for coordination of sanctions actions. Even if the UK and EU retain separate decision-making apparatus for sanctions enforcement, having some kind of formal role for one another in advising the creation of sanctions rules would help to preserve some of the benefits that existed prior to BREXIT, particularly harmonization.

- The United States should formalize its various efforts at sanctions coordination through the creation of “likeminded” coalitions on particular issues. These gatherings would not replace the need for UK-EU interaction, but they would help create a floor for this interaction while at the same time reducing some of the tensions that arise between the United States and its normal sanctions partners. Taken in combination with other mechanisms for UK-EU sanctions coordination (such as the presence of France as a permanent member of the UN Security Council alongside the UK), such a likeminded coalition would at a minimum help to smooth the transition that is inevitable as BREXIT takes place.